Pricing Christmas Light jobs can be a very difficult task but will be make the difference in having a profitable or unprofitable holiday installation season. We are going to break up some tips into a multi-part series on pricing and working with your customers so check back or subscribe to our newsletter or like us on Facebook to get updates in this series.
We are going to start with the basics and here are the two key points to keep in mind when pricing your holiday lighting jobs.
KEY FACTOR #1 - TIME IS LIMITED:
The biggest constraint to how much work you can do and how much you can make installing Christmas lights is time. Since the installation of holiday lights is seasonal and many of your business costs (insurance, rent, etc.) are not; time during the holiday season must be managed efficiently and it must sell for a premium price.
This concept will be woven into every other concept and is at the heart of how you price every job. You must make enough money during a few months of the year to survive for the entire year.
You do that by finding the right customers and charging them the right price. The more man-hours a job takes, the more you must charge. Also, be aware however that even low man-hour jobs that are unique or custom in nature can demand a premium price especially if they require the you as the owner or other key or high skill personnel to be intricately involved.
Customers who sign up late or demand prime or very specific installation dates must pay more than others who sign up early and/or are flexible with installation dates.
If you get the sense that a customer is going to be very demanding, unrealistic, or high maintenance you must adjust your price accordingly or simply refuse to take on the work. Trust us on this. You will spend way too much of your valuable time making this one customer happy that you cannot help your other customers have a great experience.
KEY FACTOR #2 - THERE IS NO STANDARDIZED PRICING:
Often potential clients will call and want to get general pricing for their Christmas lights over the phone. As a rule of thumb, I never give standard pricing because there is no such thing as a standard Christmas light job. There are too many variables that if not accounted for can drastically change your time, equipment, and materials on the job.
I recommend, as painful as it may be, to always visit the job and do a quick walk through with the owner before you give anyone an estimate. This will also give you a chance to see if the customer will be a pleasure to work with and build your business upon, or if they will become that constant nagging phone call all season long.
I do have a few brief recommendations for pricing.
On the installation side I say a three man crew with a truck needs to complete on average $3,500 worth of billable work a day during October and November. I recommend establishing a $1,500 installation minimum and that would give a very minimum amount of lights and take a half day for your average crew to install. The average amount that people spend on Christmas lighting nationwide is $1386 so $1500 is not unreasonable. Remember this is a luxury service, this is not for everyone and you can't please everyone. If you price your jobs really low in the $100-$300 range you will get $100-$300 clients that think they can nickel and dime you into letting them pay less even less. But if you want customers who are serious and ready to pay you what your time is worth, you will need to charge higher end rates.
If the customer balks at the price minimum over the phone I would simply end the conversation by explaining that our company is not a good fit but that we would be happy to sell them the lights and products needed. When you work with our company we can simply ship lights directly to your customer blind label so they will never be the wiser that you don't keep a warehouse full of Christmas lights and decor.
Our average home installation customer spends around $3,500 to have their home lit with an average amount of lights, nothing spectacular but certainly a nice, elegant look. This price includes installation, maintenance and removal, as well as a lease of the lighting and décor products needed. If you think this will price you out of the market just realize that one job at this price is a lot less work and trouble than installing 17 other jobs at $200.00, you only need a few great clients to make the same money that you would make if you did everything as cheap as possible for the customer. You will be able to fit in more quality clients and have less headaches to manage. I promise there are plenty of clients out there who will gladly pay to have this premium service if you take care of them right and do the things we suggest.
The commercial pricing is a little more complex as we have so many categories: Cities, Hospitals, Casinos, Shopping Centers, Malls, Resorts, Car Dealers, Corporate accounts, etc. At the end of the day you charge as much as you think you can get and then back down into their budget. Remember doing less items for more money is a win for you.
Let’s look at building roof lighting as one simple and common example of why there is no standard pricing.
How many levels is the building? Can you safely walk on the roof or will you need a ladder, climbing gear, or maybe even a lift? If you are walking on the roof how will you address with the owner any issues such as a broken roof tiles (they never believe a tile was ever broken until you walked on their roof)? If the roof is too steep and you must use a ladder to install the lights? Can you access every section of roof the customer is looking to have lit?
If you are using a lift can you drive it around the property to access the roof without damaging the yard, pavers, and other landscape elements? Are the power outlets along the edge of the roof with a built in photo cell timer or will you need 300 feet of extension cords to reach a fire riser room on the back of the building?
How will you know how many Amps of power are available at the outlet you have plugged into? It is not uncommon in older homes that an exterior outlet will share a circuit with a number of other interior outlets leaving little room on the breaker for holiday lights.
Will you or the customer provide the lights, extension cords, clips, and timers? Does the customer want to lease or purchase the lights?
If the customer provides the lights how were they put away last season and in what condition are they? Will you have to spend hours untangling them and then go searching for matching replacement bulbs?
Are the lights the durable LED style or are they the fragile incandescent glass bulb style that frequently breaks during installation? If the customer is providing the materials and they run out of cords or lights and you must make a second trip to finish the project does the price change?
Will you install the lights to the edge of the roof with clips, staples or glue? Is the customer aware and okay with the fact that staples and some clips may cause damage to the finish on the edge of the roof?
As you can see the number of issues to consider in just pricing this one type of installation is significant.
My recommendation to address these issues is to make a framework that provides you optimal platform to succeed with minimal problems, minimal confusion, and minimal communication with the customer. The goal is to keep it simple. In our next few blog posts we will help you outline policies that will help you be more successful so join us again next Monday for the next segment of this series - 6 Rules To Follow When Pricing Your Chr